DreamWorks Animation Signs 20th Century Fox Deal

DreamWorks Animation SKG Inc., the Glendale studio behind the Shrek and Madagascar animated movies, said late Monday that it has reached a five year distribution deal with 20th Century Fox.

Starting next year, Fox will assume certain marketing and distribution costs for DreamWorks releases running through 2017. In the deal, DreamWorks will pay Fox a fee to distribute its content to theaters, home video, international television and digital distribution outlets. DreamWorks will self-distribute its content to domestic television without paying an outside distributor. The studio recently announced that it is considering launching its own branded cable channel.

The deal concludes months of speculation as to how DreamWorks would distribute its movies going forward. The studio’s previous agreement with Paramount Pictures will end later this year. DreamWorks chief executive Jeffrey Katzenberg said the new deal will offer the studio some savings.

“Starting in 2013, DreamWorks Animation content will be distributed in the more traditional markets under a fee structure that is similar to our existing arrangement with our current distributor,” Katzenberg said in a statement. “However, our new agreement with Fox presents more favorable economics overall for DreamWorks Animation because we are taking advantage of lower costs associated with the emerging digital distribution landscape and managing domestic television.”